Mortgage Refinance

Refinancing your mortgage offers several potential benefits, including:

•  Lower monthly payments: Reduce your financial burden with a better interest rate or extended term.
• Avoiding higher interest rates: Lock in a lower rate to save money over the life of your loan.
• Shorter loan terms: Pay off your mortgage faster and save on long-term interest.
• Debt consolidation: Combine high-interest debts into one manageable payment.
•  Access to home equity: Tap into your home’s equity for renovations, education, or other major expenses.

Think of refinancing your home as a strategic move to better align your mortgage with your financial goals.

Yes, with a cash-out refinance, you can borrow against the equity in your home. This allows you to receive cash at closing, which can be used for home improvements, debt consolidation, education expenses, or other financial needs. Keep in mind that this increases your loan balance and may affect your monthly payment, so it’s important to evaluate your long-term financial goals.

Yes, choosing a credit union for your rate and term refinance can often be a wise choice. Here’s why:

• Lower rates and fewer fees: Credit unions are not-for-profit financial cooperatives that return earnings and savings to members in the form of lower borrowing rates and fewer loan fees and charges.
• More flexible terms: Credit unions are owned by and run on behalf of their members. They’re more likely to take the time to look at your full financial picture and offer personalized loan terms tailored to your needs.
• Local knowledge: With deep roots in their home communities, credit unions often offer decades of experience in local housing markets, providing borrowers with valuable insider tips and insights.

Refinancing your home loan from 7% to 6% may seem like a minor achievement, but it can save you thousands of dollars in interest charges over the life of your loan. For example, reducing the annual percentage rate (APR) from 7% to 6% on a $400,000 dollar house reduces your interest payments as follows:

• 10-year fixed-rate loan: about $24,400 less in total interest.
• 15-year fixed-rate loan: about $39,600 less in total interest.
• 20-year fixed-rate loan: about $56,500 less in total interest.
• 30-year fixed-rate loan: about $94,700 less in total interest.

That’s a lot of money back in your pocket. Whether you consider this worth it also depends on how much you will pay in closing costs and other charges,  how long you plan to stay in your home, and how affordable your new monthly payment amount will be.

There are a number of factors that can make it hard or impossible to refinance your mortgage:

• A low credit score: Most lenders want at least the mid-600s (higher for best rates).
• Not enough home equity: Usually, you need at least 3–20% equity in the home securing your loan.
• High debt-to-income ratio:  Too much debt compared to your income.
• Unstable income or employment: Lenders look for consistent, verifiable earnings.
• “Underwater” loans: If your property is worth less than you owe, refinancing becomes difficult.
• Recent late mortgage payments: Your payment history is closely reviewed during underwriting.

Even if one or more of these apply, you may still qualify with certain programs, but the terms you are offered may be less favorable.

Refinancing a fixed or variable-rate loan involves many of the same costs as applying for a new mortgage. In most cases, total refinancing costs range from about 2% to 5% of the loan amount, and may vary based on the lender, property, and loan type. Typical refinancing costs include:

• Fees
• Discount points
• Prepaid interest
• Property taxes and escrow funding

No, you do not need to be a Call Federal member to apply for a mortgage refinance loan, but you do need to be eligible to become a member if your refinancing application is approved.

You are eligible for membership if you live, work, worship, volunteer in the community, or attend school in the Richmond, Virginia Metropolitan Statistical Area, including the cities of Colonial Heights, Hopewell, Petersburg, and Richmond, and the counties of Amelia, Caroline, Charles City, Chesterfield, Cumberland, Dinwiddie, Goochland, Hanover, Henrico, King and Queen, King William, Louisa, New Kent, Powhatan, Prince George, and Sussex.